Phil Spencer, head of Microsoft's Xbox division, says the company "lost its way" with gaming. Now it's trying to refocus.
Nick Statt/CNET

Microsoft hopes Windows 10 will do many things, from revitalizing the company to winning over consumers by letting them use the same applications on a PC, tablet and smartphone. Now the operating system has a new mission: Getting more people gaming on Xbox.

By the end of the year, Microsoft will update its Xbox One game console with Windows 10, bringing Xbox and Windows together for the first time and making it easier for developers to create games with more flexibility.

Windows 10 promises app developers a hassle-free way to create programs that work across multiple devices. In the same way, game makers will soon be able to create one piece of software that Microsoft says will move from the television to the PC to everything in between. These so-called "universal" apps will have one app store and shuttle information across devices using Microsoft's Xbox Live subscription service. This gives developers a way to reach players who otherwise may have ignored one platform in favor of another.

Treating Xbox as a major Windows product is the big Microsoft-related takeaway from this year's Game Developers Conference, which took place this week in San Francisco. Throughout the week, the company held a total of 16 sessions to punctuate what Xbox head Phil Spencer called "the most important" GDC for Microsoft since 2000, when it announced the original Xbox.

The sessions were an extension of Microsoft's effort to turn around its gaming business, a situation the company focused on in January at its biggest Windows 10 event to date. At the time, Microsoft broke stride by bringing Spencer out alongside other executives to discuss the ability to play Xbox games on the PC. On Tuesday, at the company's first GDC event, Spencer once again held forth.

"Our goal in gaming at Microsoft is to let people play games wherever they are," he said. "Gaming was once central to what we did on Windows, but we lost our way." The goal now is to refocus.

Spencer and his team have a lot of work to do. Game makers have long thought Microsoft difficult to work with due to arcane publishing restrictions and often mixed messaging about the company's focus on entertainment. One of the company's lasting problems with the Xbox has been defining the vision of what the console is designed to do, and Sony has pulled ahead in the hardware race with its PlayStation 4 selling more than 20 million units. Microsoft has only publicly announced that it's sold 10 million units.

The console market is only half the problem. When it first entered the market in 2000, Microsoft's focus and resources shifted toward Xbox and away from PC gaming. The latter market, 15 years later, has since overtaken console gaming in sales and is expected to continue its dominance throughout the coming decade, according to industry watcher the Open Gaming Alliance. Valve, which runs the popular online Steam store, accounts for three out of every four PC games sold and is helping hardware manufacturers develop PC alternatives of their own, called Steam Machines, that will run Valve's very own SteamOS software, not Windows 10.

Microsoft's new Xbox app, unveiled back in January, is one among many new initiatives to bridge the gap between Xbox console players and the PC gaming community.
Screenshot by Nate Ralph/CNET

With pressure mounting, Microsoft is going to great lengths to try and reconcile with developers and PC gamers by marrying Xbox to Windows.

"The devil is in the details: will it all work?" said Brian Blau, an analyst at industry research firm Gartner. "That's one thing we don't know yet."

The efforts to convince developers and gamers alike are beginning to take shape. Developers small and large will soon be able to develop on any Xbox One unit -- not just the developer kits Microsoft sends out -- and moving a title from the Xbox One to the PC or vice versa will be doable in sometimes as little as a day. Gamers, for their part, will be able to stream a game from the Xbox One to a PC, play with other gamers using different types of hardware and, with some select titles, buy just one copy of a game and use it on multiple devices.

NPD Group analyst Liam Callahan sees this less as a move against competitors and more as evidence that Microsoft is "returning [Windows] to a focus on gaming," with the PC prominently part of the conversation, alongside Xbox.

"We see that Microsoft is trying to expand without losing focus on their main console gaming business and without taxing developers," Callahan said.

Gaming was once central to what we did on Windows, but we lost our way."

Phil Spencer, Microsoft's head of Xbox

The company is also courting goodwill from the game community with a focus on independent developers. Onstage on Wednesday, Spencer handed the reins to members of Other Ocean, the developer of indie game #IDARB, to talk about cross-play between Xbox and Windows devices. Microsoft's booth on the show floor was also filled with early partners eager to show off their games in exchange for plugging Windows 10.

"The indies don't have the resources and [Microsoft is] really giving them a shot in the arm," Blau said. "If you're the average game developer walking around the floor, you're going to notice them."

But it's far from a smooth road to win back the gaming community. With Microsoft unifying all its software, the same skepticism and potential roadblocks overshadowing the success of Windows 10 are present now with Xbox too.

If Windows 10 is not a success -- or if Microsoft can't convince consumers to stray from PlayStation or Valve's new SteamOS -- the Xbox platform may be in deeper trouble down the line.